Westwing ended 2023 with continued profitable growth in Q4 and started well into 2024. Topline outlook remains cautious.

Westwing ended 2023 with continued profitable growth in Q4 and started well into 2024. Topline outlook remains cautious.

• In the last quarter of 2023, Westwing’s topline continued to grow (GMV by 4%, Revenue by 2%) despite the challenging market environment, bringing FY 2023 figures to EUR 481 million GMV and EUR 429 million Revenue, the latter in the upper half of the guidance.
• Westwing also delivered profitability in the upper half of the updated (increased) guidance, with EUR 18 million Adjusted EBITDA in FY 2023.
• Profitability and Net Working Capital improvements resulted in EUR 30 million Free Cash Flow (FY 2023) and a strong Net Cash position of EUR 82 million (end of 2023).
• Positive Adjusted EBITDA was supported by a share increase of the high-margin Westwing Collection, which grew by 6 percentage points year-over-year to 47% of Group GMV for FY 2023.
• Management’s focus for 2024 is to drive the transformation towards a less complex, scalable platform, while initiating growth levers to scale the business with operating leverage going forward.
• Westwing had a good start into 2024, with GMV up by 6% year-to-date. Due to the ongoing challenging market environment as well as topline risks in Italy and Spain, Revenue outlook for 2024 is still cautious.
• FY 2024 guidance: Revenue of EUR 415 million to EUR 445 million (-3% to +4% year-over-year growth) and positive Adjusted EBITDA of EUR 14 to 24 million (+3% to +5% Adjusted EBITDA margin).

Munich, 28 March 2024 // Westwing Group SE (“Westwing” or “the Company”), Europe‘s No.1 in Beautiful Living e-Commerce, announces its audited results for the financial year 2023 as well as its results for the fourth quarter of 2023.

Westwing ended 2023 with a good fourth quarter and delivered on its promises of Adjusted EBITDA profitability for the full year and return to topline growth towards the end of the year.

In the fourth quarter of 2023, Westwing generated Revenue of EUR 131 million, up 2% year-over-year (Q4 2022: EUR 128 million) at 4.5% Adjusted EBITDA margin (EUR 6 million). Group Gross Merchandise Value (GMV) grew 4% in Q4 2023 compared to previous Q4. This growth was based on an increased average GMV per Active Customer, which was up 4% year-over-year. In addition, Westwing continued to grow its number of Active Customers for the second consecutive time quarter-over-quarter, to 1.3 million. The return to growth in 2023 despite the challenging macroeconomic environment marked a turnaround for the business and proved its commercial model.

In the full year 2023, the Company generated Revenue of EUR 429 million, slightly below previous year’s level (FY 2022: EUR 431 million). Given that core markets showed a significant decline in Home & Living online consumer demand, Westwing was able to realise market share gains in 2023.

With regards to profitability, Westwing reported EUR 18 million of Adjusted EBITDA in the full year 2023 (FY 2022: EUR -4 million), corresponding to an Adjusted EBITDA margin of 4.1%. This was driven by Adjusted EBITDA profitability in every quarter of 2023, leading to an Adjusted EBITDA in the upper half of the updated (increased) FY 2023 guidance (Updated FY 2023 guidance: Adjusted EBITDA of EUR 13 million to EUR 19 million). This was achieved by delivering on the promised cost savings as well as improved margins, which allowed the Company to invest into its brand awareness at the same time.

The strong improvements in Adjusted EBITDA and in Net Working Capital led to a positive Free Cash Flow of EUR 30 million in 2023, up EUR 48 million compared to 2022. Westwing ended the year with a Net Cash balance of EUR 82 million.

The financial results were driven by significant progress in all strategic initiatives. The high-margin Westwing Collection continued its upward trajectory and reached an all-time high of 47% of overall GMV in 2023, a 6 percentage points increase year-over-year (FY 2022: 41%), and is well on track to reach the 50%+ strategic target share of Group GMV. Westwing successfully rolled out the “OneWestwing” commercial model to all countries, merging the permanent Shop offering and Club Sales onto one web domain and one app. In addition, Westwing improved its Marketing with the launch of a refreshed premium corporate identity, investments into brand awareness with a “Westwing - Live Beautiful” campaign and optimisation of the full-funnel Marketing approach. 

In terms of Sustainability, Westwing’s long-term Science Based Targets were validated by the Science Based Targets initiative (SBTi). This is an important official recognition for Westwing’s commitment to championing sustainable practices and fostering positive change within its industry to reduce greenhouse gas emissions. More details on Westwing’s ambition and achievements will be provided in the Sustainability Report, to be published on 4 April 2024.

After successfully completing the turnaround in 2023, Westwing is now focused on driving the transformation towards a less complex, scalable platform in 2024, while initiating growth levers to scale the business with operating leverage going forward. This transformation includes the already started migration from a proprietary Technology platform to a Software-as-a-Service (SaaS) based platform, the consolidation of local Logistics centres in Italy, Poland, and Spain into Westwing’s European Logistics centre in Poland, and the switch to a mostly global product assortment in Italy and Spain, which comes with a restructuring of today’s Italian and Spanish corporate functions. The switch in product assortment will likely lead to a temporary topline loss in the affected countries. Besides the transformation, the Company will continue to focus on a stronger premium brand positioning across all channels and to invest into brand and customer experience. In early March 2024, Westwing opened its second physical retail space and first ever store-in-store at Breuninger's flagship fashion & lifestyle house in Stuttgart. Furthermore, the Company intends to extend its geographical footprint in Europe, with plans to launch Portugal still in 2024.

"We are pleased to report that 2023 marks a turnaround for Westwing. We were able to prove our commercial model and achieved profitable growth in the second half of the year despite challenging market conditions," says Dr. Andreas Hoerning, CEO of Westwing. "I am extremely proud of the team for our resilience, dedication and unwavering commitment during the past year. We are on a good path to become Europe’s leading premium one-stop destination in Home & Living. I am truly excited about the massive opportunities that lie ahead."

Financial Outlook 2024

Despite a successful start into 2024 with 6% GMV growth year-to-date, Westwing currently does not expect a rebound of consumer demand in 2024 and thus again a challenging market environment with high uncertainty for the remainder of the year. In addition, management expects temporary topline losses from the introduction of a mostly global product assortment in Italy and Spain in the low to mid single digit percentage range of Group Revenue for FY 2024. Therefore, for the full year 2024, Westwing forecasts Revenue between EUR 415 million and EUR 445 million with a year-over-year growth rate of -3% to +4%. Westwing forecasts an Adjusted EBITDA between EUR 14 million and EUR 24 million at an Adjusted EBITDA margin in the range of +3% to +5%. 

Webcast and Conference Call
Westwing's FY 2023 earnings call will be broadcasted via live stream on 28 March 2024, starting at 10:00 AM (CEST) on the Company's investor relations website https://ir.westwing.com. The recording of the live stream will be available on the same site.

Westwing's Annual General Meeting is scheduled for 19 June 2024. 

For more information, please visit the Westwing Investor Relations website: https://ir.westwing.com

About Westwing

Westwing is Europe‘s No.1 in Beautiful Living e-Commerce with EUR 429 million in revenue in 2023 across 11 countries. The premium one-stop destination for Design Lovers is offering a unique brand experience with a curated assortment of the Westwing Collection and the best design brands. The integrated platform combines Shop, Club Sales, offline Stores, B2B services and Westwing Studio. The team consists of 1,700 professionals working together towards a shared purpose to “excite people to create homes that unlock the full beauty of life”. Founded in 2011, Westwing is headquartered in Munich and went public on the Frankfurt Stock Exchange in October 2018.

Disclaimer

Certain statements in this communication may constitute forward looking statements. These statements are based on assumptions that are believed to be reasonable at the time they are made, and are subject to significant risks and uncertainties. You should not rely on these forward-looking statements as predictions of future events and the Company undertakes no obligation to update or revise these statements. The Company’s actual results may differ materially and adversely from any forward-looking statements discussed in this press release due to a number of factors, including without limitation, risks from macroeconomic developments, external fraud, inefficient processes at fulfilment centres, inaccurate personnel and capacity forecasts for fulfilment centres, hazardous material / conditions in production with regard to private labels, lack of innovation capabilities, inadequate data security, lack of market knowledge, risk of strike and changes in competition levels.

Contact
Westwing Group SE
Investor Relations
E-Mail: ir@westwing.de